The U.S. consumer price index (CPI) for February 2021 rose seasonally adjusted 0.4 percent in February 2021, after rising 0.3 percent in January, according to data from the U.S. Bureau of Labor Statistics dated March 10th. With that in mind, Bitcoin price added to March 9th gains, hitting a new 2-week high of over $ 56,000.
Bitcoin price rally over $ 56,000
At the time of writing, Bitcoin price has risen 15 percent for weeks, up 3 percent in the past 24 hours, according to trackers.
Over the past week in particular, Bitcoin price has been on a recovery path. It reverses from the $ 43,000 pits last week of February and prints higher pressure due to institutional demand.
Analysts are putting the revival in crypto and particularly bitcoin prices on inflation concerns.
Bitcoin’s inflation-hedging properties and the excellent price development in recent months are now causing a mess.
Public corporations and institutional investors are flocking to Bitcoin to protect their assets from value-adding inflation and capital gains.
The fears of the $ 1.9 trillion stimulus package
Part of President Joe Biden’s election promises was to offer more financial aid to the economy.
The focus was on the release of even more checks to affected households in the country.
To that end, the approval of the $ 1.9 trillion stimulus package was vital. Therefore, the Senate’s approval of the mega-stimulus package last week was a win for the president.
However, the combination of an accommodative monetary policy characterized by record low interest rates and a Federal Reserve open to a cashless economy creates the possibility of higher inflation in the near future.
Heading headline inflation to push BTC prices even higher
Jeffrey Gundlach, the founder of DoubleLine Capital, is already predicting that the US economy will warm up.
According to his forecast, the result could lead to headline inflation rising above the FED target from two percent to over three percent. If it tops four percent, Jeffrey says, it could scare the bond market.
Although government bond yields are rising, FED officials are concerned and expect inflation to rise in the medium term but to contract in the months to come.
On the other hand, rising inflation could boost demand for Bitcoin and push prices even higher. As reported by BTCManager, Kraken CEO Jesse Powell is forecasting a Bitcoin price of $ 1 million.
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